. We find evidence of strong cross-sectional dependence in the panel, and clear support to a valid cointegration … policy and public debt. The aim of this paper is to address the challenges posed by the estimation of the discretionary … fiscal reaction function for the Euro area. We exploit recently introduced testing and estimation strategies for …

scope for stabilising output. Using panel data covering close to 50 EU and non-EU countries, we provide evidence that the …

a dynamic panel on aggregate and disaggregated fiscal policy variables. We find strong support that numerical fiscal …

change in the interest rate paid by governments on their debt in a panel of 14 European countries over four decades. This is … done in the context of a panel vector autoregressive (PVAR) model, using sign restrictions via the penalty function method … of Mountford and Uhlig (2009) to identify structural cost of borrowing shocks. Our baseline estimation shows that a one …